More than intent: A bundling model of MNE–SME interactions

Hennart, Jean‐François

doi:10.1057/s41267-020-00352-8

Cited by 15 publications

(6 citation statements)

References 69 publications

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“…To a great extent, their survival and progress rely on the success of their international operations. However, an underresearched area in international business (IB) is: what drives the performance of mMNEs (Hennart, 2020;Kano et al, 2020). Studies suggest that SMEs become successful mMNEs as they can palliate their liabilities of smallness and foreignness while pursuing complex internationalization strategies and operating successfully in international markets through entry modes other than exports (Prashantham, 2011).…”

Section: 1mmnesmentioning

confidence: 99%

Combatting global disruption through tertius iungens orientation of CEOs: A moderated-mediated mechanism

Agnihotri¹,

Bhattacharya

Jafari‐Sadeghi

2023

Journal of International Management

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Section: 1mmnesmentioning

confidence: 99%

Combatting global disruption through tertius iungens orientation of CEOs: A moderated-mediated mechanism

Agnihotri¹,

Bhattacharya

Jafari‐Sadeghi

2023

Journal of International Management

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“…We may add that recent approaches to present TCE as a theory on bundling complementary resources rather than on minimizing transaction costs (Hennart, 2020; Hennart and Verbeke, 2022) implies a much more complicated view on what the hierarchy and control actually means in an MNE.…”

Section: Why Does Ib Research Assume Mne Supremacy?mentioning

confidence: 99%

The MNE as the “crown of creation”?: a commentary on mainstream theories of multinational enterprises

Forsgren

Yamin

2022

CPOIB

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Purpose The purpose of this paper is twofold: to analyse what theories assume about multinational enterprises (MNEs) when they claim these are superior and to discuss possible explanations for why MNE superiority seems to be dominant in the international business (IB) research field. Design/methodology/approach A common theme in mainstream IB theories is that multinational enterprises (MNEs) are superior in terms of cost efficiency and innovativeness compared with other types of organizations. A closer look at transaction cost economics (TCE)/internalization theory, evolutionary theory and dynamic capability theory reveal a bias toward MNE supremacy because of how MNEs are conceptualized as firms and therefore fail to explain the essence of “multinational advantage”. These revelations and the strong dependence on the benevolence to provide unbiased data means that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact. Findings Although mainstream theories differ when it comes to the building blocks that constitute MNE supremacy, they have one attribute in common: they are silent as to why MNEs are superior compared with, for example, domestic firms or other types of economic agents. Irrespective of whether the focus is the strength of the hierarchy, the skill of managers or a common identity, nothing in the theories tells us that these factors are more pronounced in MNEs than in other types of economic actors. Originality/value The paper deals with the issue of multinational advantage. It claims that mainstream theories of MNEs tend to assume, explicitly or implicitly, that MNEs are superior in terms of cost efficiency and innovativeness compared with other types of economic agents. The analysis demonstrates that this tendency is a consequence of how MNEs are conceptualized as firms in the different theories as well as of the strong dependence in IB research on the benevolence of MNEs to provide unbiased data. It is concluded that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.

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“…Empirical studies on knowledge flows within MNCs, such as Gupta and Govindarajan (2000) and Feinberg and Gupta (2004), focus on knowledge flows between the subsidiary and the headquarters or other subsidiaries and largely omit analysis of knowledge flows from the host country to the subsidiary. This gap exists even though recent literature has made a strong case for studying how the local context shapes the multinational subsidiary (Hennart, 2020; Khanna & Palepu, 2010; Khanna, Palepu, & Sinha, 2005; Meyer & Estrin, 2014; Mudambi, Pedersen, & Andersson, 2014; Santos & Williamson, 2015). Within this nascent literature, Meyer and Estrin (2014) argue that host country resources such as local knowledge and local talent are critical for MNC subsidiaries.…”

Section: Conceptual Antecedentsmentioning

confidence: 99%

Role of context in knowledge flows: Host country versus headquarters as sources of MNC subsidiary knowledge inheritance

Teodorescu

Choudhury

Khanna

2022

Global Strategy Journal

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Research Summary We respond to calls in the strategy and international business literature for elucidating how multinational subsidiaries develop contextual intelligence in host countries and how they use the local context as a source of valuable opportunities for learning. Applying the theoretical lens of subsidiary absorptive capacity and building on a gravity model, we propose an approach that can distinguish and compare the influences of the host country context and headquarters over the subsidiary knowledge production. Some subsidiaries may become global second headquarters and innovation hubs, as evidenced qualitatively in the paper with the case of Cisco. Essentially, subsidiaries, characterized by higher stocks of knowledge and greater number of locally hired employees are likely to absorb relatively more knowledge from the local host country context. Managerial Summary Managers at multinational companies have to carefully balance acquiring knowledge from the headquarters, vis‐a‐vis acquiring knowledge from the local context of countries where the firm has subsidiaries. In contrast to a “headquarter‐centric” approach where most of the knowledge management activities are centered around the MNC headquarters, we argue that larger subsidiaries, often characterized by a large presence of local R&D workers, might disproportionately draw knowledge from the local context, rather than from the headquarters. In addition to developing theoretical propositions along these lines, we provide an illustrative example of how Cisco opened a “second headquarters” in India, to learn from the rich local context.

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More than intent: A bundling model of MNE–SME interactions

Cited by 15 publications

References 69 publications

Combatting global disruption through tertius iungens orientation of CEOs: A moderated-mediated mechanism

Combatting global disruption through tertius iungens orientation of CEOs: A moderated-mediated mechanism

The MNE as the “crown of creation”?: a commentary on mainstream theories of multinational enterprises

Role of context in knowledge flows: Host country versus headquarters as sources of MNC subsidiary knowledge inheritance

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